A withdrawal strategy defines how much you pull from your portfolio each year in retirement and how you adjust for market performance, inflation, and longevity. The best-known is the "4% rule" — withdraw 4% in year 1 and adjust for inflation annually.
A withdrawal strategy defines how much you pull from your portfolio each year in retirement and how you adjust for market performance, inflation, and longevity. The best-known is the "4% rule" — withdraw 4% in year 1 and adjust for inflation annually.
How much you can spend is the single most consequential number in a retirement plan. Bill Bengen's 4% rule, Guyton-Klinger guardrails, bucket strategy, and dynamic withdrawal all try to solve the same problem: maximize spending without running out of money.
The 4% rule was built for a 30-year retirement starting in the worst historical year (1966). If you're retiring in a year with reasonable starting valuations, 4.5–5% is typically sustainable — and Guyton-Klinger guardrails can push that even higher.
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